Positive economic signs push stocks

Positive economic signs push stocks

NEW YORK — Wall Street got back to focusing on the economy instead of the Federal Reserve on Tuesday, sending stocks higher.

Four reports showed a brightening U.S. economy. Housing and manufacturing continued to improve, and consumer confidence hit its highest level in 5½ years.

The major U.S. stock indexes closed higher, with the Dow Jones industrial average shooting up 100.75 points, or 0.7 percent, to 14,760.31. The Standard & Poor’s index rose 14.94 points, or 1 percent, to 1,588.03.

The triple-digit rise in the Dow continues a bout of market volatility caused by investors and traders who are worried about the Fed ending its economic stimulus. Last Wednesday, Fed Chairman Ben Bernanke said he expects the Fed to end its bond buying by the middle of 2014 if it feels the economy can manage without that stimulus.

The Dow then plunged by triple digits on three of the next four trading days, with investors worried that the market would struggle without the Fed propping it up.

Some investors have concluded that the recent sell-offs were overblown. Quincy Krosby, a market strategist at Prudential Financial, guessed that shorter-term traders were the ones buying stocks Tuesday because they judged that parts of the market were “oversold.”

Long-term investors are likely still sitting on the sidelines, waiting for further signs that markets are becoming less volatile, she said.

Among the biggest gainers were big dividend payers like phone and power companies. These are stocks that have been hit the hardest by the recent sell-off.

The stronger economic news for the U.S. led investors to sell U.S. government bonds, a sign that they’re more comfortable putting money in stocks. The yield on the 10-year Treasury note, a benchmark for many types of loans, rose to 2.6 percent from 2.54 percent late Monday.

The price of gold slipped $2 to $1,275.10 an ounce, and the price of crude oil rose 14 cents to $95.32 a barrel.

BARNES & NOBLE: It plunged after reporting a loss that more than doubled in the latest quarter. The bookseller struggled to compete with online retailers and its Nook e-book continued to lose money. The stock fell $3.21, or more than 17 percent, to $15.61.